This archive report was first published on 14 June 2020.
As the world grapples with the unprecedented impact of the Covid-19 pandemic, Kenya has not been spared. The country's economy has been severely affected, with massive job losses, shuttered businesses, and livelihoods impacted. In a bid to help households and businesses remain afloat, the National Treasury Cabinet Secretary Ukur Yatani unveiled a budget with several policy measures targeted at small and medium-sized enterprises (SMEs) to get back to their footing.
According to Kenya National Chamber of Commerce and Industry President Richard Ngatia, the government's decision to gradually ease restrictions will resuscitate the economy, ensuring cash flow, resumption of businesses, and creation of jobs. However, it is crucial to note that all health protocols and guidelines must be observed to curb the possible spike of the coronavirus disease.
Ngatia emphasized the importance of embracing the new normal of social distancing, high personal discipline, and hygiene, as well as the use of technology to do business. He also commended the Treasury for creating a credit guarantee scheme, which will be financed to the tune of Sh100 billion to ensure SMEs access credit at affordable rates.
The chamber and Equity Bank have also signed a pact for the establishment of a Sh200 billion Post Covid-19 recovery kitty to resuscitate the economy. Ngatia expressed gratitude that President Uhuru Kenyatta has prioritized cushioning SMEs from the ravages of the pandemic, as their collapse would have a tragic ripple effect on the entire economy.
CS Yatani has announced that all firms will start paying the minimum tax, which is one per cent of revenue, regardless of making a profit. However, Ngatia urged for a relook into this matter to stimulate local investment and not vice versa. He also emphasized the need to create a framework that caters for the unique portfolios of SMEs, including sole proprietorships, to ensure they benefit from the stimulus package.
As a chamber, Ngatia's organization is supplementing government efforts by training members on financial probity, bookkeeping, investments, and connecting them to ready markets for their products and services. He also commended the Treasury CS for rooting for buying Kenyan goods to boost local manufacturing, with a reduction of taxes on imports for inputs used in diaper manufacturing, and Sh600 million to buy locally assembled vehicles.
